Post-grant proceedings under the AIA have created a much more complex environment for patent owners in terms of both valuing their patent assets and monetising them, as David Donoghue of Holland & Knight explains.

The bulk of patent disputes, whether through litigation or licensing campaigns, are settled with the accused infringer (defendant) agreeing to pay an amount significantly less than it would have cost to defend a patent litigation. In these settlements, the most sophisticated patent defendants discount the cost of litigation for the present value of money, and factor in numerous other externalities such as the time and focus business and engineering teams have lost by supporting the company’s litigation defence.

In a world where taking a patent litigation—even a clear winner—to final judgment could easily cost $1 million or more, those defence settlements can be very lucrative. Whether the patent owner is seeking $10,000 each from 200 entities, $100,000 each from 75 entities, or even $500,000 from 20 entities, the numbers quickly add up. And the profit margins are substantial, with all expenses outside of acquiring the patent portfolio paid only upon success in the form of a contingent fee.

The America Invents Act (AIA) significantly changed the patent licensing playing field. The AIA created several post-grant review proceedings—covered business method review, inter partes review and post-grant review. While there are some important differences between the various proceedings, their similarities are most important in understanding how they have altered patent licensing. Key similarities include: